The Milwaukee-based manufacturer (NYSE: HOG) suffered a 3 percentage point decline in market share of the United States retail market in the Indian's category, for motorcycles with engine displacement of more than 600 cubic centimeters. Harley dropped from 58 percent of the market in the fourth quarter of 2012 to 55 percent in the most recent quarter, according to slides that accompanied its earnings release (you can see the charts to the right).

"When we look at Indian, they sold some motorcycles in the fourth quarter," Harley Chief Financial Officer John Olin said on a conference call with analysts. "We expected that. They've been out of business for quite some time and Polaris has been promoting them heavily. So they sold some motorcycles, but nothing outside our expectations at all."

He also blamed some of the market share loss on Harley's decision to temporarily take its Road Glide motorcycle off the market for an upgrade, according to a SeekingAlpha transcript.

Harley CEO Keith Wandell said the company is taking Polaris seriously. "Clearly, Indian has targeted Harley-Davidson, but so has Honda and so has Suzuki and Yamaha and other companies over the years as well."

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